US Stocks Fall; Bond Yields Rise 05/12 09:36
Stocks were broadly lower again Wednesday as investors' concerns about
inflation grew after government data showed signs of prices increasing across a
number of goods.
(AP) -- Stocks were broadly lower again Wednesday as investors' concerns
about inflation grew after government data showed signs of prices increasing
across a number of goods.
The S&P 500 index was down 0.8% as of 10:15 a.m. Eastern. The Dow Jones
Industrial Average was down 0.6% and the technology-heavy Nasdaq Composite was
Investors reacted negatively to the Commerce Department's report that showed
consumer prices rose 0.8% in April, with inflation rising the fastest
year-over-year since 2008. Investors have been worrying that inflation could
return after being absent for many years as the economy revs out of the
recession brought on by the pandemic. However Federal Reserve officials and
other economists have said moderate inflation may be a good thing in a recovery.
Investors have worried about inflation since bond yields spiked earlier this
year, though yields have mostly stabilized since then. The yield on the 10-year
Treasury did bump up on the inflation report, rise to 1.66% from 1.62% the day
Rising inflation makes stocks seem more expensive, particularly high-value
tech stocks that trade on the potential for their future profits in coming
years. Apple, Microsoft, Facebook and Amazon were all down 1% or more.
Energy prices continued to climb following the shutdown of a major gas
pipeline on the East Coast earlier in the week, and there are now reports of
gasoline hoarding happening in places like North Carolina. Crude oil prices
rose 1.7% and wholesale gasoline rose 1.3%.